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Articles : Investment Advisers Faced a Tumultuous Regulatory Year

Investment Advisers Faced a Tumultuous Regulatory Year

By: Ira R. Halperin

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By Gisella Rivera

In 2011, the executive, legislative and judicial branches of the U.S. government focused their not inconsiderable efforts on the regulatory regime surrounding investment advisers.  This article provides an overview of selected court decisions, and regulatory and legislative actions significantly affecting the asset management business.

Private Right of Action

An investor’s private right of action for securities fraud has been judicially created by courts in cases where no such remedy is explicitly provided for in the law.  In 2011, courts in Curran v. Principal Management Corporation and Janus Capital Group v. First Derivative Traders have narrowed the application of these rights, giving investment advisers bright line rules in determining their liability under the causes of action brought therein….